China and the United States: from the trade war to the "freezing war"?

On the front of the trade war, the line chosen by Donald Trump probably has not changed: force the Beijing authorities to move, limiting the negative effects on the US economy. Since the launch of the initiatives in the spring of 2018, the attitude has changed little. It is based on a favorable economic situation to harden the tone of a Chinese trade policy considered unfair. Of course, the measures taken will have a negative impact on US growth. Is the action undertaken not "long-winded"?

But the starting point in terms of tempo activity is high enough that the risk of "losing some feathers" is accepted. And then, if the degradation is stronger, the economic policy is solicited. Is not that what is happening with monetary policy? Even if the execution by the Fed is not up to the expectations of the White House. The US Administration admits that it can not "run all the hares at once". If the Chinese file is at the center of his concerns, then it is probably necessary to "let go of the ballast" on the file of the commercial relations with Europe and Japan. Just as it seems wise to seek to make "drop the pressure" diplomatic or even military, on the borders of the Arab and Persian worlds …

>> Read also – "Donald Trump is the only bulwark against the Chinese steamroller"

What is the view of Beijing?

The Chinese authorities are convinced that the United States has only one objective of rebalancing bilateral trade. Uncle Sam does not want to be CHALLENGE, not to say exceeded, by a conquering China. Under these conditions, we must prepare for persistent tensions between the two countries. These will not disappear with a change of US Administration.

>> To read too – does Donald Trump have a good chance of being re-elected?

The important thing is to ensure that the Chinese economy is not too affected by a crisis that is made to last. This is the case so far, in the face of a US strategy largely based on higher tariffs. The objective of structural reforms must not be set aside (upgrading of production, pollution control, deleveraging and poverty reduction) and the use of stimulus measures must be calibrated to the necessary level, no more .

>> Subscribe to our newsletter Companies and Markets

In terms of international economic relations, it is timely to move closer to other countries than the United States, without "cutting the bridges" with the United States.

>> To read also – Relocation, cheat, discount … As China resists the offensive Donald Trump?

Sino-US tensions between risks and prospects

The main risk is runaway. Was not this the case during the month of August? The United States makes an opening, after hardening their device, considering that it is a "good way". China reacts to hardening, no doubt considering that the "right way" is negligible amount. This displeases the United States, which is re-hardening its policy.

>> Our service – A test to know your investor profile and benefit from an investment advice online, free, personalized and followed

Each party must ensure that the file remains "manageable" and does not begin to follow autonomously a "crazy race", by the simple game of overbidding in the reactions of each party to the initiatives of the other.

>> Read also – Commercial War: Winners and Losers

Three conclusions are needed then. First, neither government today is ready to change its position (there is no question of giving the impression of giving in). Then, the file of the Sino-American relations will not disappear from the "front of the scene" before a long time. Finally, the risk of a loss of control by both actors is real.

>> Read also – "Vietnam is the big winner of the trade war between Donald Trump and China"

If the relations between the United States and the USSR from the 1950s to the beginning of the 1990s have been described as "cold war" (strategic and military rivalry against the backdrop of the great weakness of economic relations), it may be necessary to it uses the expression "ice war" to illustrate those to come between China and the United States, against a backdrop of strategic and economic rivalry, even military.

>> On video – Why the China-US trade war could last until 2021

>> Join the Capital Club des Boursicoteurs on Facebook (click on the image)